AMB Property Corporation and ProLogis expect the Japan earthquake to cause up to $15 million in damages to their combined portfolios.
As the fund managers work towards merging the world's largest industrial REITs and private fund managers, AMB revealed it faced between $4 million and $6 million in damages, with roughly 40 percent of the damage affecting the firm’s ¥54.5 billion (€473 million; $673 million) Japan Fund.
San Francisco-based AMB operates and is developing more than 10 million-square-foot of logistics space in Japan, including a facility in one of the most affected regions, Sendai, and had originally estimated damage at up to $10 million. Stressing that all its employees and customers were “safe and uninjured”, AMB said engineering assessments and work performed to date indicated that the damage suffered would cost between $4 million to $6 million to repair, with insurance policies covering property damage and loss of rental income.
The Sendai logistics facility suffered “moderate non-structural damage” and is expected to be operational within the next 30 days. AMB’s Tokyo office is also set to reopen Tuesday following “transportation disruptions and uncertainty associated with the situation at the Fukushima Daiichi nuclear power plant”. AMB added in the statement that it was also providing temporary space to “displaced customers and relief agencies supporting recovery efforts”. The firm has also donated to the Red Cross International Response Fund, pledging to match employee contributions.
AMB’s Japan Fund was originally raised in 2005 with 13 institutional investors committing ¥49.5 billion with AMB co-investing a further 20 percent. “We feel very fortunate that none of our employees or customers were injured during this unprecedented natural disaster,” said Michael Evans, AMB managing director Asia. “We are honoured to be able to contribute space for the relief and recovery efforts, and look forward to supporting our customers and rebuilding the global supply chain.”
ProLogis recently revealed it had suffered up to $9.5 million of damage to its facilities, which include the ProLogis Parc Iwanuma in Sendai. The firm said the facility had suffered flood damage to the first [ground] floor but no structural damage was seen, although initial estimates indicate damage at the facility could cost up to $6 million. The facility provided a “safe haven to a number of people during the earthquake and tsunami,” the Denver-based firm said. “The priority in the area needs to remain on the search for survivors and aid to victims.” Another facility in Sendai, ProLogis Parc Tomiya II, was located on higher ground and was not impacted by the tsunami.
ProLogis has a further eight buildings in the Tokyo area, including one under construction, with no reports of structural damage. “The majority of repairs will be to the exterior of the buildings, parking lots and access points due to damage to the perimeter roadways.” Insurance will cover property damage and loss of income.
The firm is also contributing to the ProLogis Foundation to aid the relief efforts and has set up a Mercy Corps pogramme to match donations from its associates globally.